Montreal rental market eases but rents continue to climb

Montreal’s rental market is showing signs of easing, with vacancy rates rising slightly, but rents continue to climb, putting many units out of reach for low-income households, according to a report from the Canada Mortgage and Housing Corporation (CMHC).

Vacancy rates rise, but affordable units remain scarce

The city’s vacancy rate rose to 2.9 per cent in 2025, driven by more completed construction and fewer temporary residents, according to the CMHC.

Vacancy was highest among newly built units, while affordable units remained scarce. Increases in housing completions and fewer international students and temporary workers also contributed to the higher vacancy rates.

Some say the rising rents are taking a toll on their dreams of stable housing. “I’m trying to build a house but for a 20 by 20 house is 200,000, like wow, I’m 50 years old and my dreams have been shot,” said one Kahnawake resident. “I work three jobs and I have a one-room with two grandkids, a living room and one bedroom.”

Catherine Lussier, coordinator at the advocacy group FRAPRU, warned that the increase in available units has not eased the burden on renters. “Even if we increase the amount of housing apartments to make it maybe more available, like in Montreal I think you can see the cases, even though we have now a vacancy rate that is higher than the equilibrium itself, we still have a rent increase that was 11.9 per cent in one year only… so we’re maybe having more availability, but the crisis of affordability is deeper in itself,” she said.

Rents continue to outpace incomes

Despite the easing, rents for two-bedroom apartments rose 7.2 per cent between 2024 and 2025. Condominium units generally command higher prices, and some newer, high-priced units remain empty. Landlords are offering incentives such as rent-free months to attract tenants.

Lussier explained the impact on low-income households: “Definitely in the capacity of being able to find something that they can really afford and that they will not be able to not have to cut in the food, medicine or other actual needs or as important as housing… They could easily lose their rent and then maybe end up in a situation of homelessness.”

She also noted how legal rent increases contribute to financial pressure: “A lot of them basically had the 5.9 per cent that were to rise by the Tribunal administratif du logement played also a role in how fast the rent increased. And this also is a preoccupation that we have to have because basically we’re saying those are legal, but it’s $50, $70 more on the rent every year. It’s every month, it’s a lot of money for a lot of tenants.”

Social housing remains critical

The province’s Housing Tribunal recommended a record-high annual rent increase of 5.9 per cent for 2025, which many landlords applied to renewed leases. The Quebec government has also adjusted how rent increases will be calculated starting in 2026.

For Lussier, the market highlights the urgent need for social housing: “Urgent since many years. We’ve been repeating and repeating how social housing plays a role in assuring the respect of the right to housing… We’re lacking social housing, we’re lacking options that are not the private market for tenants of low and modest income that are struggling since many years.”

She emphasized solutions outside the private market: “A big solution [is] social housing by offering something that is out of the market, out of the logic of the market. And that for us is something that we cannot move away from. And that’s something that the government needs to invest urgently in. Obviously, we can have better protection for tenants, better rent control, real rent control.”

Future outlook for renters

While vacancy rates are higher for newly built, high-priced units, affordable housing remains limited. Longer listing periods, fewer viewings, and reduced online interest suggest more competition for tenants, particularly in areas like Downtown Montreal, Notre-Dame-de-Grâce, and the South Shore.

Lussier warned about the consequences if housing affordability is not addressed: “That definitely the incapacity for a lot of tenants, specifically if everything continue to increase… Obviously, the incapacity for a lot of them to be able to find a place that they will be able to pay… If we’re talking about single mothers with children, sometimes it could lead to insecure residential insecurity that they can lose the children just because they’re unable to afford a place to stay.”

She also placed responsibility on the provincial government: “The Quebec government has a huge part of responsibility in what’s happening right now that it hasn’t acted as it should have acted in the last years, like including in terms of social housing investment… We hope that we will see a change of direction before the election, in the next budget, but we hope also that the other political parties are going to take a really high stand on the sole development of social housing in terms of the next election.”